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Real Estate Economics
Introduction to Real Estate
Terms in this set (73)
What is a property valuation?
A informal way of estimating a subject property value.
What is financing and what are the several sources of lendable funds for real estate?
The business of providing funds for real estate transactions; commercial banks, savings/loans, mortgage bankers, credit unions, and life insurance companies.
What does the Florida Real Estate Commission do?
They oversee and regulate the real estate license law and licensed individuals that participate in the real estate business.
What is a Property Transfer and how can it be transferred?
Transferring of legal title to one party to another, by deed, will, lease or other legal methods
What other types of Businesses and activities are also dependent upon real estate activities?
Property management, appraisers, banking industry, development, and construction.
What dos the FREC define the term Real Estate Business as?
A vocation in which real property forms the stock in trade that is bought, sold, leased or rented.
Uniform Standards of Professional Appraisal Practice; Rules and guidelines that must be followed by appraisers.
Subdivision Plat Map
The layout of a subdivision showing lots, roads, and other infrastructure by the developer to a local government agency.
Real Estate Brokerage
A commercial activity in which the sale, purchase, leasing, rental, exchange or management of real property is conducted by qualified and licensed individuals acting either for themselves or for others for compensation
A selected and limited geographical district to which a sales associate devotes special attention and study; to farm an area or neighborhood.
A deliberate transfer of land by its owner for public use and accepted for such use by the public.
Comparative Market Analysis (CMA)
An informal estimate of market value performed by a real estate licensee for the seller to assist in arriving at an appropriate listing price, or if working with the buyer, an informal estimate of market value to assist the buyer in arriving at an appropriate offering price.
A supported defended estimate of the value of property rights as of a given date.
What does Florida require business brokers to have to market business opportunities?
Real Estate License.
Business Opportunity Brokerage
The marketing and sale of a going concern operation
What is a going concern operation?
Marketing and sales of up and running businesses.
Property owner who does not reside on the property & who often relies on a professional property manager to manage the investment
What is another word for Business Brokerage?
Business Opportunity Brokerage
Residential Real Estate
Single Family Homes, Condos, Duplexes and Apartments where people live and reside.
Commercial Real Estate
Shopping Centers, Warehouses, office buildings etc.
Agricultural Real Estate
Farms and other agricultural land such as, citrus grovers and timberland operations.
Industrial Real Estate
Properties located in Industrial parks or properties zoned for industrial use such as manufacturing and distributing.
What does practicing in Commercial Real Estate require?
Knowledge in investment analysis and cash flows
After a Plat Map is approved by local government where is it recorded?
Public records of the county where the subject property is located.
What must be submitted to local government before developing?
Subdivision Plat Map of the proposed project.
What is infrastructure?
Sewer, Water, Electrical, Streets and Storm Drains.
What is subdivision development and what will the developer typically install?
Step 2 in development & construction, the process off preparing the land for subdividing the parcel into individual smaller parcels ; Infrastructure.
What should land developers always consider before acquiring land?
Zoning laws and government planning policies.
Step 1 in development and construction ; locating and acquiring suitable land.
What makes Land suitable for Acquisition?
reasonable price and the capability of being developed.
How does a Real Estate Counselor get paid?
On a hourly basis or a predetermined fee based upon the nature of the job and the counselor's experience/qualifications.
Why has property management grow in importance?
An increase of absentee owners.
What is property management?
The management of properties owned by others for compensation.
What are the 5 major sales specialties.
Residential, commercial, industrial, agricultural, businesses.
How are property managers paid?
They are paid a fee for their services typically a percentage of the gross rent.
What are the licensing requirements for Mortgage Bankers and Mortgage Brokers.
a separate and distinct license, must be licensed in the state of Florida.
What are the 3 phases of development and construction?
1. Land acquisition 2. Subdividing and developing 3. construction
What is a property manager typically responsible for and what is their goal?
Locating tenant's, collecting rent, providing maintenance, and handling landlord/tenant relationship ; to generate the greatest amount of net income while at the same time maintaining the property in good condition.
What are the various activities of real estate brokerage?
Sales and leasing, Property management, Property Valuation, Financing and Counseling.
What is a real estate counselor and what do they do?
They act as a consultant by researching on the subject real property and its community location ; they make recommendations about the subjects ultimate value.
What does licensee do after they they establish the proper market value (listing price) of a home?
Procure a purchaser through the various market techniques available.
What various market techniques are available to procure a purchaser?
Drafting effective advertisements, participating on Multiple Listing Service ( MLS ), offering open house presentations and effective , showing of real estate to potential purchasers.
What does a broker do?
Supervises and is legally responsible for all actions of the sales associates and office employees.
What is a sales associate?
An agent of a broker, works for the public on behalf of the broker. They must not be directly employed by the public.
What are the majority of appraisals performed at the insistence and request of?
What do mortgage lenders require before approving a loan?
What must Mortgage lenders have reliable assurances of for a mortgage loan?
that the value of the property will provide sufficient collateral ( security ) for the the mortgage loan.
To appraise real estate in Florida what must you have?
You must be a state certified or licensed appraiser.
Can real estate licensees provide valuations or appraisals?
Who must follow USPAP guidelines?
What are Valuation services commonly referred to?
Comparative Market Analysis (CMA).
What is another word for Broker Price Opinion?
How does a licensee preform a CMA?
1. Research sales data of comparable properties ( comps )
2. Review their past selling prices, current listings, and identify comps that were previously listed for sale but did not sell.
3. Once gathering, licensees will review it and establish a range of values for the subject property and suggest a listing price
Will CMA's be relied upon by lending institutions, and why?
No, because it has less complex nature and isn't considered an appraisal.
What do licensees typically provide as a free courtesy?
CMA or Broker Price Opinion.
How are appraisers compensated?
A flat fee basis depending on the difficultly of the task and the time involved in the appraisers preparation.
Why are appraisers not paid a percentage of the subjects property value?
To avoid a conflict of interest situation.
After a development Is completed what is a homeowners association usually charged with?
Maintaining streets and other common facilities.
Through what process does a developer transfer the ownership of the streets and utilities to the local government?
Is the local government responsible for maintenance and upkeep after a developers dedicates land to them ?
What are the 3 types of residential construction?
Speculative, Tract, Custom.
Builder owns the land, constructs a house to the builders taste and satisfaction, and then offers the completed construction for sale to the public.
Type of spec construction that involves some input from the buyer for design and layout of a particular floor plan or model previously chosen by a developer.
Builder consults with landowner and constructs a home in accordance with the landowners wishes and designs.
What are the 3 entities of government that influence real estate?
Local, State and Federal Government.
How does local government influence real estate?
They implement zoning laws, building codes and establish property taxes through police powers.
How does State Government influence real estate?
In Florida they have implemented many laws protecting our environment and waterfront properties.
What is the leading government agency in this area and what part of government are they in?
Department of Environmental Protection ( DEP ) ; State Government.
How does Federal Government influence real estate?
through federal agencies and regulations that influence real estate ownership.
What various federal agencies and regulations influence real estate ownership?
Department of Housing and Urban Development (HUB), Department of Veteran Affairs (VA), Federal Housing Administration (FHA), and the Federal Reserve System (the "FED")
Real Estate Licensee have the opportunity to join various real estate trade organizations such as:
- The National Association of REALTORS® (NAR)
- The Florida Association of REALTORS® (FAR) and their local board association.
Licensees are prohibited from using the term ______ unless they are current members in good standing with local, state and national associations of REALTORS®.
What does the National Association of REALTORS® (NAR) code of ethics set forth?
High standards of conduct, that must be followed by all its members.
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